PSA HealthCare Announces Fourth Quarter Results for Fiscal Year 2006

Share Name	Share Symbol	Market	Type
Pediatric Services OF America (MM)	NASDAQ:PSAI	NASDAQ	Common Stock

Pediatric Services OF America (NASDAQ:PSAI)
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PSA HealthCare (Nasdaq:PSAI) announced today financial results for fiscal year 2006. Highlights of PSA�s results for the fourth quarter and year ended September 30, 2006 include: Three sequential quarters of staffing over 800,000 nursing hours; Continued strong cash collections; Year over year revenue growth of approximately 5%. For the fourth quarter of fiscal 2006, net revenue from continuing operations increased $1,568,000 to $31,896,000 as compared to $30,328,000 in the third quarter of fiscal year 2006. Net loss from continuing operations was $2,458,000 in the fourth quarter of fiscal year 2006 as compared to a net loss from continuing operations of $530,000 in the third quarter of fiscal year 2006. Net loss was $1,279,000 in the fourth quarter of fiscal year 2006 as compared to net income of $624,000 for the third quarter of fiscal year 2006. Basic and diluted net loss per share was $0.17 in the fourth quarter as compared to net income per share of $0.08 in the third quarter of fiscal year 2006. In the fourth quarter, the Company established an allowance of $2,431,000 on the full value of the insurance recoveries receivable from its former worker�s compensation insurance carrier whose financial condition significantly deteriorated during the quarter. For the year ended September 30, 2006 net revenue from continuing operations increased $5,214,000 to $119,360,000 as compared to $114,146,000 in the year ended September 30, 2005. Net loss from continuing operations was $6,196,000 in the year ended September 30, 2006 as compared to a net loss of $5,580,000 for the year ended September 30, 2005. Continuing operations net loss per share was $0.84 in the year ended September 30, 2006 as compared to a net loss per share of $0.77 in the year ended September 30, 2005. Basic and diluted net income per share was $3.25 for the year ended September 30, 2006 which included $3.33 for the gain on the sale of discontinued operations as compared to net income per share of $0.79 for the year ended September 30, 2005. �We are now solely focused on leveraging our core competency in pediatric nursing via our PDN and PPEC operations,� said Daniel J. Kohl, President and CEO of PSA HealthCare. "Our fiscal 2006 was highlighted by the monetization of the Pharmacy segment�s assets and subsequent monetization of the RTES segment�s assets in the first quarter of fiscal 2007 for total consideration of $107.4 million. These transactions have enabled us to build a cash balance in excess of $70 million to utilize as growth capital for acquisitions and start-up activities. Additionally, our focused business model greatly aided our ability to achieve a full-year record of 3.3 million nursing hours staffed.� Conference Call A conference call to discuss these results has been scheduled for Tuesday, December 12, 2006 at 11:00 a.m. ET. The dial-in number for all Participants is 800-374-1702. Note: To join the Q&A session, please press the asterisk followed by 1. If you are unable to listen to the live broadcast, replays of the conference call will be available until December 26, 2006 by dialing 800-642-1687. To connect with the replay of the conference call, please refer to the PSA HealthCare Earnings Call, Passcode: 3807069 #. PSA provides comprehensive pediatric home health care services through a network of over 54 branch offices in 18 states, including satellite offices and branch office start-ups. Through these offices, PSA provides a combination of services, including pediatric private duty nursing (PDN), and pediatric day treatment centers (PPECs). Additional information on PSA may be found on the Company's website at http://www.psahealthcare.com. NOTE: This press release contains certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) relating to future financial performance of PSA Healthcare (the �Company�). When used in this press release, the words �may,� �targets,� �goal,� �will,� �could,� �should,� �would,� �believe,� �feel,� �expects,� �confident,� �anticipate,� �estimate,� �intend,� �plan,� �potential� and similar expressions may be indicative of forward-looking statements. These statements by their nature involve substantial risks and uncertainties, certain of which are beyond the Company�s control. The Company cautions that various factors, including the factors described hereunder and those discussed in the Company�s other filings with the Securities and Exchange Commission, as well as general economic conditions, industry trends, the Company's anticipated uses of the proceeds from the sale of its Pharmacy and RTES Businesses, the integration of the Melmedica acquisition, assimilate and manage previously acquired field operations, collect accounts receivable, including receivables related to acquired businesses and receivables under appeal, hire and retain qualified personnel and comply with and respond to billing requirements issues, including those related to the Company�s billing and collection system, nurse shortages, competitive bidding, HIPAA regulations, adverse litigation, workers� compensation losses, availability and cost of medical malpractice insurance and reduced state funding levels and nursing hours authorized by Medicaid programs, could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements of the Company made by or on behalf of the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of an unanticipated event. New factors emerge from time to time, and it is not possible for management to predict all of such factors. Further, management cannot assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. PSA HEALTHCARE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) � � � Twelve Months Ended September 30, September 30, 2006� 2005� � � Net revenue $ 119,360� $ 114,146� Costs and expenses: Costs of goods and services (exclusive of depreciation shown separately below) 72,560� 68,195� Other operating costs and expenses Administrative and marketing salaries, wages and benefits 19,927� 19,537� Business insurance 4,766� 4,165� Overhead � 7,571� � 6,983� Other operating costs and expenses 32,264� 30,685� Corporate, general and administrative Salaries, wages and benefits 14,211� 14,128� Business insurance 255� 208� Professional services 3,816� 4,476� Overhead � 2,781� � 2,880� Corporate, general and administrative 21,063� 21,692� Provision for doubtful accounts 126� 679� Provision for insurance recoveries 2,431� -� Depreciation and amortization � 1,032� � 997� Total costs and expenses � 129,476� � 122,248� � Operating loss (10,116) (8,102) Interest income 2,248� 212� Interest expense (564) (2,481) Loss on early extinguishment of debt (837) -� Other income � 54� � 65� � Loss from continuing operations before income tax benefit (9,215) (10,306) Income tax benefit � (3,019) � (4,726) Loss from continuing operations (6,196) (5,580) Discontinued operations: Income from discontinued operations before income tax expense 9,194� 18,320� Income tax expense 3,591� � 7,074� Income from discontinued operations � 5,603� � 11,246� Gain on disposal of discontinued operations before income tax expense 40,562� -� Income tax expense 15,844� � -� Gain on disposal of discontinued operations � 24,718� � -� Net income $ 24,125� $ 5,666� � Income per share data: Basic net income per share data: Loss from continuing operations $ (0.84) $ (0.77) Income from discontinued operations 0.76� 1.56� Gain on disposal of discontinued operations � 3.33� � -� Net income $ 3.25� $ 0.79� � Diluted net income per share data: Loss from continuing operations $ (0.84) $ (0.77) Income from discontinued operations 0.76� 1.56� Gain on disposal of discontinued operations � 3.33� � -� Net income $ 3.25� $ 0.79� � � Weighted average shares outstanding: Basic � 7,413� � 7,203� Diluted � 7,413� � 7,203� � � � CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION � September 30, 2006 September 30, 2005 � � � Cash and cash equivalents $48,848� $19,036� Accounts receivable, less allowance for doubtful accounts 17,705� 14,941� Total stockholders' equity 101,432� 73,569� PSA HEALTHCARE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data) � � � Three Months Ended September 30, June 30, 2006� 2006� � � Net revenue $ 31,896� $ 30,328� Costs and expenses: Costs of goods and services (exclusive of depreciation shown separately below) 19,743� 18,395� Other operating costs and expenses Administrative and marketing salaries, wages and benefits 5,057� 5,159� Business insurance 945� 1,217� Overhead � 1,991� 1,881� Other operating costs and expenses 7,993� 8,257� Corporate, general and administrative Salaries, wages and benefits 3,616� 3,516� Business insurance 64� 68� Professional services 1,094� 784� Overhead � 641� 746� Corporate, general and administrative 5,415� 5,114� Provision for doubtful accounts 64� (3) Provision for insurance recoveries 2,431� -� Depreciation and amortization � 286� 258� Total costs and expenses � 35,932� 32,021� � Operating loss (4,036) (1,693) Other income -� 46� Interest income � 581� 656� � Loss from continuing operations before income tax benefit (3,455) (991) Income tax benefit � (997) (461) Loss from continuing operations (2,458) (530) Discontinued operations: Income from discontinued operations before income tax expense 1,815� 1,905� Income tax expense 699� � 747� Income from discontinued operations � 1,116� 1,158� Gain on disposal of discontinued operations before income tax (benefit) expense -� Income tax (benefit) expense (63) � 4� Gain on disposal of discontinued operations � 63� (4) Net income $ (1,279) $ 624� � Income per share data: Basic net income per share data: Loss from continuing operations $ (0.33) $ (0.07) Income from discontinued operations 0.15� 0.15� Gain on disposal of discontinued operations � 0.01� (0.00) Net income $ (0.17) $ 0.08� � Diluted net income per share data: Loss from continuing operations $ (0.33) $ (0.07) Income from discontinued operations 0.15� 0.15� Gain on disposal of discontinued operations � 0.01� (0.00) Net income $ (0.17) $ 0.08� � � Weighted average shares outstanding: Basic � 7,521� 7,492� Diluted � 7,521� 7,492� � � � CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION � September 30, 2006 June 30, 2006 � � � Cash and cash equivalents $ 48,848� $ 53,116� Accounts receivable, less allowance for doubtful accounts 17,705� 16,804� Total stockholders' equity 101,432� 102,264� � Nursing PPEC Consolidated Total � Twelve Months Ended September 30, 2006 � Net revenue $ 108,406� $ 10,954� $ 119,360� � Costs of goods and services (exclusive of depreciation shown separately below) � Nursing and therapist salaries, wages, benefits and supplies 71,908� 563� 72,471� Disposables/Supplies � 49� � 40� � 89� Total cost of goods and services 71,957� 603� 72,560� Other operating costs and expenses Administrative and marketing salaries, wages and benefits 14,037� 5,890� 19,927� Business Insurance 4,375� 391� 4,766� Overhead � 5,756� � 1,815� � 7,571� Total operating costs and expenses 24,168� 8,096� 32,264� � Provision for doubtful accounts 151� (25) 126� Depreciation � 178� � 202� � 380� � Branch office contribution margin $ 11,952� $ 2,078� $ 14,030� � � Twelve Months Ended September 30, 2005 � Net revenue $ 103,529� $ 10,617� $ 114,146� � Costs of goods and services (exclusive of depreciation shown separately below) � Nursing and therapist salaries, wages, benefits and supplies 67,544� 576� 68,120� Disposables/Supplies � 43� � 32� � 75� Total cost of goods and services 67,587� 608� 68,195� Other operating costs and expenses Administrative and marketing salaries, wages and benefits 13,812� 5,725� 19,537� Business Insurance 3,801� 364� 4,165� Overhead � 5,355� � 1,628� � 6,983� Total operating costs and expenses 22,968� 7,717� 30,685� � Provision for doubtful accounts 704� (25) 679� Depreciation � 182� � 188� � 370� � Branch office contribution margin $ 12,088� $ 2,129� $ 14,217� � � � � � Twelve Months Twelve Months Ended Ended September 30, September 30, 2006� 2005� � Total profit for reportable segments $ 14,030� $ 14,217� � Corporate, general and administrative (21,063) (21,692) Corporate depreciation and amortization (652) (627) Provision for insurance recoveries (2,431) -� Interest income 2,248� 212� Interest expense (564) (2,481) Loss on early extinguishment of debt (837) -� Other income 54� 65� � � � Loss from continuing operations, before income tax benefit $ (9,215) $ (10,306) � Nursing PPEC Consolidated Total � Three Months Ended September 30, 2006 � Net revenue $ 29,045� $ 2,851� $ 31,896� � Costs of goods and services (exclusive of depreciation shown separately below) � Nursing and therapist salaries, wages, benefits and supplies 19,567� 156� 19,723� Pharmacy product and supplies -� -� -� Disposables/Supplies � 13� � 7� � 20� Total cost of goods and services 19,580� 163� 19,743� Other operating costs and expenses Administrative and marketing salaries, wages and benefits 3,618� 1,439� 5,057� Business Insurance 858� 87� 945� Overhead � 1,478� � 513� � 1,991� Total operating costs and expenses 5,954� 2,039� 7,993� � Provision for doubtful accounts 24� 40� 64� Depreciation � 55� � 65� � 120� � Branch office contribution margin $ 3,432� $ 544� $ 3,976� � � Three Months Ended June 30, 2006 � Net revenue $ 27,582� $ 2,746� $ 30,328� � Costs of goods and services (exclusive of depreciation shown separately below) � Nursing and therapist salaries, wages, benefits and supplies 18,228� 145� 18,373� Pharmacy product and supplies -� -� -� Disposables/Supplies � 12� � 10� � 22� Total cost of goods and services 18,240� 155� 18,395� Other operating costs and expenses Administrative and marketing salaries, wages and benefits 3,631� 1,528� 5,159� Business Insurance 1,112� 105� 1,217� Overhead � 1,444� � 437� � 1,881� Total operating costs and expenses 6,187� 2,070� 8,257� � Provision for doubtful accounts 59� (62) (3) Depreciation � 45� � 46� � 91� � Branch office contribution margin $ 3,051� $ 537� $ 3,588� � � � � � Three Months Three Months Ended Ended September 30, June 30, 2006� 2006� � Total profit for reportable segments $ 3,976� $ 3,588� � Corporate, general and administrative (5,415) (5,114) Corporate depreciation and amortization (166) (167) Provision for insurance recoveries (2,431) -� Other income -� 46� Interest income 581� 656� � � � Loss from continuing operations, before income tax benefit $ (3,455) $ (991)

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PSAI Pediatric Services OF America (MM)